First Time Buyer Woes as Prices Fall

The number of chartered surveyors reporting house price falls has reached levels last seen during the early nineties house price crash, new figures show.

The Royal Institution of Chartered Surveyors (Rics) said 49.1% more chartered surveyors said house prices fell during December than those who reported a rise, the lowest figure since November 1992.

At the same time, demand remained subdued with 25% more surveyors reporting a fall in the number of people looking to buy a new house compared with those who saw an increase, while sales fell for the seventh month in a row.

The group said many people had been prevented from moving by mortgage lenders tightening their lending criteria, although it added that likely further cuts in interest rates could help to stabilise the situation.

But despite this, surveyors’ confidence in house prices and sales going forward has reached its lowest level since October 1998 when the question was first included in the survey.

There is now little doubt that the long awaited housing market slowdown is under way, with most house price indexes reporting monthly property price falls, while the number of mortgages being approved also fell to a three year low in November.

Rics spokesman Ian Perry said: “The housing market is clearly feeling the pinch from the credit crunch and the round of interest rate hikes in 2007.

“While sentiment seems to have reached its lowest ebb, the underlying economic conditions are vastly different to what the country experienced in the early 1990s.”

He added that the coming months would be of “great importance” to the market, as many potential buyers would be waiting to see if the Bank of England reduced interest rates again.

Surveyors reported seeing house price falls across all regions of England and Wales, with the heaviest falls concentrated in the West Midlands and East Anglia.